By Promit Mukherjee and David Ljunggren
OTTAWA, Dec 16 (Reuters) – The Bank of Canada says regulations on future Canadian stablecoins must ensure they are backed by high-quality liquid assets and are pegged one-to-one to the central bank’s currency, Governor Tiff Macklem said on Tuesday.
The Liberal government said in November it would introduce regulations next year for stablecoins, a form of cryptocurrency that is convertible to a fiat currency at par.
“We want stablecoins to be good money, like banknotes or money deposited in banks,” Macklem said.
“A stablecoin should be pegged on a one-to-one basis to the central bank currency and backed by high-quality liquid assets so that it can always be converted to cash at par,” he told the Montreal Chamber of Commerce.
High-quality liquid assets are typically government-backed securities, such as treasury bills and government bonds.
The conditions for redeeming stablecoins should be fully disclosed, including the timing and fees that must be paid, Macklem said.
Ottawa wants to bring Canada’s financial system up to speed with many other advanced and developing economies, including the United States, that are harnessing the potential of cryptocurrencies.
The legislation will help build confidence in the system so that fiat-backed stablecoins are safe for use by consumers and businesses, the Ministry of Finance says. The central bank will be the regulator of the asset.
“The goal is to ensure Canadians can take advantage of stablecoin innovation and do so securely,” Macklem said in his final public appearance of the year.
Macklem said 2026 would see more innovation in the financial system as Canada modernizes its financial payments system.
This includes the creation of Real-Time Rail, a payments system that will enable instant settlements between consumers and businesses in Canada, as well as across borders.
The bank also intends to work on implementing an open banking system, which will make it easier for consumers to compare and switch banks, he said.
((Reuters Ottawa office))
Keywords: CEN BANK OF CANADA/